In this blog, PrOPEL Hub partner Professor Alan Felstead from Cardiff University discusses the contribution of employees to workplace innovation and some of the factors that are associated with workers having a greater capacity and willingness to offer innovative ideas.
The role played by innovation in solving economic challenges, such as slowing productivity and weakening economic growth, has been recognised by a lengthening list of policy makers. Innovation is traditionally measured in terms of R&D expenditure, patent applications and/or employer-level reports of breakthroughs in product development or service delivery. However, Professor Alan Felstead (a member of the ESRC PrOPEL Hub) and colleagues from the University of Oxford and the UCL Institute of Education have taken a different approach. They have designed and analysed a series of questions for use in a large scale survey of workers carried out in Britain every five years.
Professor Felstead and colleagues’ research makes two distinctive contributions. First, it provides a bottom-up perspective to innovation measurement by asking employees about the ideas and suggestions they make about improving work processes, products or services. Within their surveys, questions were developed with the aim of capturing the three stages of the innovation process – the generation of ideas, their implementation and their impact. The resulting data provide new insights into the extent to which employees of all kinds come up with ideas about improving the work processes they use, the products they make and services they provide.
Secondly, the research examines what drivers are associated with these innovative behaviours. The research finds that employee involvement exercised individually and/or collectively is positively and significantly associated with employees’ capacity and willingness to offer innovative ideas. This finding is in line with theorists who emphasise the positive role of trade unions as well as those who highlight the positive role that individual voice can also play. Furthermore, these features of work explain a quarter of the variation in the innovative activities reported.
However, despite the benefits of employee involvement, the data suggest that involvement has fallen in Britain over the last decade – task discretion has declined, involvement in organisational decision-making has fallen and trade union influence over work organisation has weakened. Yet, previous UK governments have failed to take a lead in reversing these trends. Currently, companies only have to consider ways of taking the workers’ views into account when making board level decisions and none of the UK’s top 100 listed companies have appointed a worker to the board of directors. These trends and actions run contrary to the evidence on the correlates of employee-driven innovation. That said, the threshold at which employers are required on request to inform and consult with employees will be lowered in April 2020. This represents a small move in the right direction.
The evidence also suggests that training and learning which encourages creative thinking has a strong link to innovation as does the presence of target setting and appraisals linked to pay and/or training opportunities. These findings corroborate previous studies on the links that training and performance management have with innovation. Support and development accounts for a quarter of the variation in employee-driven innovation, while performance management explains a fifth of the variation with the complete model explaining in excess of half.
From a policy perspective, the research suggests that supporting a handful of already innovative sectors in the economy in order to strengthen the UK’s economic base needs to be complemented by a more general purpose policy response of tapping into employees’ knowledge of production, so that improvements in innovation come from all sectors and occupational levels. While targeted government investment in particular high profile sectors might raise performance in these sectors, it is unlikely to trigger a general levelling up of performance across the economy. On this basis, the House of Commons recently concluded that ‘The Government’s Industrial Strategy isn’t doing enough for the “everyday economy”, in sectors such as retail and hospitality where millions of Brits are employed’ and where around one in three ‘low innovation jobs’ are found. Based the research carried out by Professor Felstead and his colleagues, a campaign is needed to raise the innovative performance of all parts of the economy with increasing individual and collective employee voice at its core.